STVP-2002-002

Oct 1, 2002

Airify Communications:
The Wireless Router Company

In November of 2001, Dominik Schmidt, founder and CEO of Airify Communications, was watching
the business news at his home in Palo Alto. The NASDAQ had just tumbled another 200 points and the US
economy was heading into recession. The Internet dot com craze was over and many of the Internet start-ups
had gone up in smoke. It was a difficult time for start-up companies, and many of the “gold-diggers” were
leaving Silicon Valley and returning to more stable and well-established companies.

In the midst of the chaos, Airify Communications had nearly finished designing their first product, a
wireless chipset that could connect to 802.11a, 802.11b, GPRS and Bluetooth standards. This was the first chip
in the industry that could potentially support all the wireless standards. Dominik believed that the new Airify
chip had the potential to revolutionize the wireless industry and that the chip would be ready in time to meet the
market rollout of these four standards.

So far, the development of the product had been on schedule and Airify’s engineering team had
already taped out their demo product. However, there had been heated discussions about whether they should
include a fifth standard, GPS, in their first product. These discussions were as intense as the occasional debates
about whether Stanford or Cal Berkeley was a better Engineering School, which sometimes occurred because
most of Airify’s engineers had earned degrees at one or the other of those cross-town rivals. Dominik smiled as
he thought about this. He enjoyed these heated discussions in the company, because he believed that they would
lead to better solutions. However, his team could not come to a consensus on the issue of whether or not to
include compatibility with the GPS Standard in Airify’s new product.

From his computer at home, Dominik logged onto Airify’s network server and looked at the online
schedules of his executive team. He blocked out two hours on the following Monday morning for a meeting
with his executives and sent an email request to them:

This case was prepared by Sei Wei Ong, Graduate Student at Stanford University School of Engineering under the
supervision of Thomas J. Kosnik, Consulting Professor, Stanford School of Engineering, and Wong Poh Kam, Associate
Professor, National University of Singapore as the basis for class discussion rather than to illustrate either effective or
ineffective handling of an administrative situation. It was made possible in part through financial support from the National
University of Singapore

Copyright © 2003 by the Board of Trustees of the Leland Stanford Junior University and Stanford Technology Ventures
Program (STVP). To request permission to reproduce materials, contact 1-650-723-2973, or email Professor Tom Kosnik at
kosnik@stanford.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or
transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the
permission of Stanford Technology Ventures Program.
Airify Communications STVP-2002-002

Dear Team,

Let’s meet on 9:00 AM Monday to decide whether or not to include GPS compatibility in the rollout of our
first product. I appreciate the many views that you have raised with regard to this issue, but it is time for us
to make a decision.

As discussed, I have located an IP provider that can help us implement the GPS protocol, so acquiring the
technology should not be difficult. The Federal Government’s E911 initiative requiring all cell phones to
have the same location-finding capability as fixed telephone lines is an excellent market entry point for a
GPS enabled chip. Furthermore, by including GPS, we will be able to reach even more customers.

However, including GPS compatibility will incur extra cost in developing the chip and may delay the
delivery of our product.

We want to ride the wave as the market starts to adopt these new wireless standards. Any delay in the
product launch could potentially cause us to lose key customers and miss the market cycle.

Timing is everything.

I hope you will take some time to think about these issues and the final decision will be made during the
meeting next week.

Best regards.

Dominik.

Overview of the Wireless Industry

The roots of the wireless industry could be traced back to 1883 when Thomas Edison first discovered
that electrical signals could be sent over long distances. This technology slowly evolved to provide telegraph
services and other specialized wireless services. It was not until a century later, when the US Federal
Communications Commission (FCC) issued its first cellular license, that the cell phone industry really started to
take off.

In 2001, the wireless industry had become very large and complex. The number of wireless
subscribers had quadrupled from less than 200 million in 1997 to 770 million by the end of 2001. (Exhibit 1)
There were many players, ranging from start-ups to multi-national companies that formed different parts of the
value chain. To describe this industry better, a framework was developed to help understand the different
segments of the market. The five segments of the framework are described briefly below, and Exhibit 2 shows
a pictorial representation of the wireless segments.1

The first segment consisted of the wireless component providers. They competed by producing
innovations in components such as baseband components, radio frequency (RF) components antennas, etc.
which allowed devices to communicate using a variety of wireless protocols. Texas Instruments and Qualcomm
were the two market leaders in providing baseband components. The major players in the RF components
market were Motorola, Philips and Infineon. Other companies were positioned to provide specialized chipsets.
For example, Intersil and Agere were the leading providers for 802.11 chipsets. Due to the rapid advancements
of technology and the huge variety of standards, this segment was a key breeding ground for many start-ups
such as Atheros Communications, Cambridge Silicon Radio and ArrayComm.

The second segment was the network equipment suppliers who made the physical infrastructure to
make wireless networks function. They designed and manufactured the radio base stations, the receivers, the
switches and other components of the network. Ericsson dominated the wireless infrastructure market with a

1 For more information on the wireless industry and a detailed explanation of the framework, refer to “Wireless
Industry in 2002”
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market share of about 34%. Other key players in this market were Nokia, Motorola and Lucent. Traditionally,
the network equipment manufacturers had sold primarily to carriers who built extensive wireless networks to
serve enterprises and consumers. However, with the increased popularity of Wireless Local Area Networks
(WLANs), network equipment suppliers had started to market their products to enterprises and consumers
directly. From 2000-2002, a number of startups had also entered the network equipment segment with
technological innovations to carve out a piece of the pie for themselves.

The third segment was the end-terminal manufacturers. This segment was divided into 5 sub-segments
– Laptop Manufacturers, Mobile Phone manufacturers, Personal Digital Assistant (PDA) manufacturers,
Automotive Telematics and Wireless-Enabled Appliances. Mobile phones were traditionally the end-terminals
of a wireless transmission and were the key product in this space. Although laptops and PDAs had become
increasingly popular over the last 5 years, most of them were not wirelessly connected and had to be plugged
into a fixed Ethernet connection for network access. The increasing importance of mobility and connectivity
suggested that these two sub-segments could potentially become key growth areas. Although voice
transmission would continue to be the key application for mobile phones, data transmission was the key usage
for the laptops and PDAs. The automotive telematics sub-segment was still nascent in 2002, and automobile
companies had started implementing navigational equipment in their vehicles using Global Positioning System.
(GPS) This was still a very expensive option and thus a relatively rare occurrence. The final segment, wireless-
enabled appliances was also a very new segment. This space included printers or digital cameras that were
fitted with a wireless receiver module thus allowing the equipment to receive wireless data, usually using the
Bluetooth protocol.

The fourth segment consisted of the carriers who were mobile service providers. The players in this
space were companies that licensed the spectrum from the government, bought infrastructure from the network
equipment manufacturers, deployed the infrastructure and provided wireless services to individual consumers or
corporate users. They also served as the distribution channel for mobile phone manufacturers. Examples of
mobile service providers in the U.S. included AT & T, Sprint, Verizon, and Cingular Wireless.

The final segment, wireless software providers, was divided into 3 segments depending on their
customer types. These segments were 1) Carrier-Focused. 2) Enterprise-Focused. 3) Consumer-Focused. This
sub division further highlighted the complexity of this space, because of the different services that each segment
needed. The carriers needed software applications that could improve the network management and to provide
value-added services to their customers. Enterprise-focused companies were trying to provide software that
could help to extend company operations over wireless networks, or business software that could leverage the
wireless capabilities that corporations had set up. Finally, consumer-focused companies provided mobile
applications for individuals, and this included mobile gaming, content aggregators, scheduling and other
software. This segment was probably the newest in the entire wireless space, and many start-ups were rising up
to create software that could use the wireless networks of the future.

Wireless Component Providers

Within the wireless framework that was developed earlier, Airify Communications fell into the
wireless component providers segment. However, unlike the major players in this space such as Conexant and
Intersil who had their own foundries and could manufacture their own components, many of the start-ups in this
space such as Airify or Atheros were known as fabless semiconductor companies. This was because
constructing a semiconductor wafer fabrication plant (fab) was extremely capital intensive. In 2001, Integrated
Circuit Engineering (ICE) and the Gartner Group estimated the cost of new wafer processing facilities to be in
the region of $2–3 billion. As a result, many of these start-ups focused on technology improvements and
innovations of the chip design, guarding their intellectual property fiercely and outsourcing their manufacturing
to foundries such as Taiwan Semiconductor Manufacturing Company (TSMC).

The presence of fabless semiconductor companies was a reflection of the fragmentation of the
vertically integrated semiconductor industry in the 1990s. Companies were starting to specialize in one or two
segments of the semiconductor chain, and focusing their efforts in areas such as manufacturing, design tools,
intellectual property, etc. One of the major drivers for this disintegration was the rapid development of the
wireless industry. The wireless device companies demanded smaller devices that had greater functionality and

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less power consumption. This put tremendous pressure on semiconductor companies to innovate and meet the
demands of their clients. Furthermore, most of these products had short life cycles, and so new chips and
technology were continually needed to keep up with the rapid pace of customer demands. These forces created
opportunities for specialized start-ups that were flexible enough to meet the volatile needs of their customers.

One of the primary ways to condense the size of wireless chipsets was to reduce the number of chips
required to perform certain functions. When Intersil released the PRISM I (802.11) product in 1998, the chipset
required 8 different chips to function. Through a series of integration and innovation, this number had been
reduced to 3 chips in the PRISM III product that was launched in 2000. The smaller chipset also reduced the
cost of manufacturing by almost fourfold and cut down the power consumption of the chip. This was an
important trend in the wireless chipset industry. The “holy grail” was to engineer a System on Chip (SoC)
design that could put all the functionality required for wireless transmission onto one single chip. The company
that was the closest to achieving this was Atheros Communications, who announced a two-chip solution to
implement 802.11a, including an incorporated power amplifier.

Although the wireless chipset space was still relatively new in 2001, several companies were well
positioned to capture the market when the new wireless technologies rolled out into the market. One example
was Intersil. Intersil was thought to have a dominant share in the emerging 802.11b standard. UBS Warbug
estimated that Intersil’s PRISM baseband, media access controller (MAC) and RF solutions would occupy
about 60% of the market.2 Furthermore, they already had numerous design wins from major companies such as
Cisco, Compaq, Siemens, Nokia, and Dell who were planning to incorporate their chipset into their wirelessly
enabled devices. Intersil was also a founding member of the Institute of Electrical and Electronics Engineers
(IEEE) committee that had developed the 802.11 standard. This gave them an insider advantage to guide the
development of new standards. Exhibit 3 shows the projected market size for the IC chip for the Wireless LAN
market. The diagram includes both the 802.11a and 802.11b standards. Since 802.11b would reach the market
first, the number of chipsets for this standard would be higher at first, but 802.11a would pick up later. Exhibit
4 shows the projected revenues for Bluetooth IC chips.

Atheros Communications was one of the leading developers of 802.11a chipsets. The first 802.11a
devices that were shipped in January 2002 were based on the same wireless chipset/reference model from
Atheros, AR 5000. These devices included Proxim’s Harmony, Intel’s Pro/Wireless 5000 and SMC Networks’
2755W access points. The highly integrated AR5000 solution was an all-CMOS chip that improved
performance and power efficiency significantly. Most radio chips were made either on silicon-germanium or
gallium-arsenic wafers. Atheros’s innovative breakthrough in creating an all-CMOS radio chip reduced the cost
of the chip by a factor of 10, because the chip could be fabricated using mainstream materials and standard
manufacturing processes. As companies moved towards setting up wireless LAN networks in their offices,
industry observers believed that Atheros was positioned at the sweet spot to profit from this market adoption.

ArrayComm is another start-up in this segment that is specialized in designing smart antennas that
could be retrofitted onto base stations to reduce signal interference and improve spectral efficiency. This
reduced the number of dropped calls and increased the capacity in each cell. Martin Cooper, CEO of
ArrayComm faced the uphill task of trying to convince the network equipment manufacturers that smart
antenna was a critical technology needed for 3G to work. However, this technological breakthrough could
potentially affect the sales of current base stations. As a result, it was very difficult for ArrayComm to gain
headway in their interactions with these entrenched incumbents.3 This example clearly depicted some of the
difficulties experienced by start-ups in this segment, who were trying to sell to multi-national corporations who
controlled the network equipment market.

2 UBS Warburg, Intersil Corp, Dec 4,2001

3 Red Herring, Apr 2 2002, Briefing on Wireless.

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Airify Communications

History
Airify Communications was founded at the end of 2000 by Dominik Schmidt, then a Ph.D. student in
the electrical engineering department at Stanford University. Dominik had recently helped bring his first
semiconductor start-up, Pixel Devices, to revenue and he felt that it was time for him to move on to new
opportunities. The bursting of the dot com bubble had caused the economy to take a dive. Many start-ups were
folding up and venture capitalists were trying to save their most promising portfolio companies, and sell or shut
down the rest. Despite the gloomy outlook, Dominik believed that there were still real opportunities and real
problems that needed to be solved. He was particularly interested in the wireless space and the rapid
developments in that industry.

Dominik’s idea of designing a re-configurable radio chip came from his experience while working
with Altera, a company specializing in programmable logic devices. The number of wireless standards
available in the market and the continual introduction of new standards made such a chip extremely valuable.
Dominik envisioned a chip that could be programmed to connect to every wireless standard. On top of that,
Dominik wanted a chip that could seamlessly switch from one network to another network without any loss of
connectivity.

This technology was sometimes known in the industry as a “soft” chip or 4G. This meant that the chip
was not specifically hard-coded for one protocol, but rather was able to run software that allowed it to connect
to different standards. However, this was deemed to be extremely technologically challenging by most industry
observers and they estimated that it would be at least two to three years before this technology would become
available. On the other hand, Dominik believed that Airify could complete this revolutionary chip by the third
quarter of 2002.

Dominik knew that to succeed, he had to recruit the best engineers in the industry to build this product.
The first few engineers to join the team relished the challenge of such a project and were attracted to building a
product that could potentially revolutionize the wireless chipset industry. About two thirds of the company was
Stanford and Berkeley graduates and almost one third of the employees had PhDs. They wanted to build “The
Universal Wireless Company”.

Market Need
The cellular world had a number of standards that were currently in use (GSM, CDMA, TDMA, PDC,
CDPD, etc.) and would see even more standards in the future (GPRS, EDGE, w-CDMA, CDMA2000) as
carriers moved towards 3G.

The fixed wireless world had a number of competing standards such as Bluetooth, 802.11a, 802.11b,
HiperLan and new standards such as 802.11g and 802.15 that would soon be introduced. These protocols were
completely incompatible and thus made the wireless space fragmented and disconnected. Devices that wanted
to connect to more than one standard needed to buy multiple chip sets. This would increase the manufacturing
cost and the size of the device significantly. Furthermore, developing a dedicated chip for one protocol gave no
insurance against a new standard that might obsolete the previous standard.

As mobility and connectivity became more important to the urban workforce and consumer, the ability
to connect to more than one protocol would become critical. For example, a laptop user would want to be able
to connect to the GPRS network when he was on the road so that he could log on to the company network and
retrieve the information that he needed to perform his job. When he stopped at a Starbucks outlet for a break,
he would want to connect to the 802.11b access points that offered him data rates that were 100 times that of the
GPRS network. When the employee returned back to the company at the end of day, he wanted to be able to
connect to the internal 802.11a network that was 500 times better than the GPRS network and more
importantly, it was free to the user. In the past, to perform these tasks, the laptop user would require 3 different
PCMCIA cards for each of the protocols. Each of the standards had different data rates, operated at different

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frequencies and had different protocols. As a result, dedicated hardware and software were needed to meet the
needs of each standard. Furthermore, by using multiple interface cards, it was not possible to switch seamlessly
across different standards, causing disruptions in the connectivity.

Airify Communications would meet this market need by creating the universal connectivity platform.
The cost-effective and power efficient single-chip wireless solution, would serve as a bridge between analog
information, digital computation and radio communication, allowing the device to function effectively on all of
these standards. Furthermore, intelligence was built into the chip that powered the chip to track all wireless
resources within its radio environment and seamlessly switch to the most optimum wireless network as it
became available.

Funding
Airify Communications received its first round of funding in January 2001 for a total of $5.2 million.
The initial investors in the company were Invemed Associates, Intellect Partners and Asset Management
Company, among others. Airify’s management expected their second round of funding to be completed by
early 2002, and were looking for $12-$15 million to bring them to their next set of milestones.

The Airify Product

Value Proposition
Unlike other competitors who were trying to build a dedicated chip for one standard, or trying to pack
a chip with 2 or 3 standards, Airify’s engineers had taken a completely different approach to solving the
multiple-standards problem. They combined re-configurable hardware blocks with a flexible CPU and
adjustable analog circuits. In effect they were building a processor that was able to run “wireless software”.
Each wireless protocol was a piece of “wireless software” that could be processed by the Airify chip.

The core design of the Airify solution made it much more flexible and efficient compared to existing
solutions in 2001. Although the chip was the critical platform that would enable the multi-protocol connectivity,
it was the software components that made the solution completely programmable. This flexibility enabled
Airify to customize the chip to support only the standards that the customers were interested in. Exhibit 5
shows a schematic of the Airify chip.

After much market analysis and discussions among the team, Airify decided that their first chip would
have software components that could support 802.11a, 802.11b, GPRS and Bluetooth. These were standards
that seemed to be gaining considerable traction and market share. Airify wanted to be at the forefront to
provide the chipsets necessary to power these devices when these technologies hit in the market. Most
customers wanted only two protocols on their wireless platform (802.11b and GPRS was the most demanded
combination). By offering a flexible hardware platform with customizable protocol software, Airify could
provide the desired combination without fabricating multiple chips. Furthermore, the chip could be upgraded
through software to support more standards such as HiperLan, PHS, EDGE, etc. Airify planned to introduce
these technologies as they gained more headway in the market. If certain aspects of existing wireless protocol
got modified, software upgrades could also be used to make those modifications without a complete hardware
overhaul.

With the rise of more standards and Airify’s capability to connect to these different protocols on a
single chip, an integrated routing technology was necessary to allow for seamless switching when moving from
one network to another. Airify developed this technology in-house and believed that it was one of its primary
value propositions. Airify’s product could switch from one network to another network in a matter of
milliseconds and thus would not disrupt the connectivity of the device. By being the first to introduce a wireless
routing protocol, Airify hoped to guide the industry into developing a new standard for wireless protocol
switching.

Furthermore, by integrating most of the chip components into a single chip, Airify was able to reduce
the power consumption of the chip significantly. The main engineering objective was to offer a power
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consumption comparable or lower than existing single-protocol chips. Thus the Airify chip, while operated in
GPRS mode, would consume less power than the corresponding Infineon or Conexant GPRS chips. For mobile
devices, it was crucial that power consumption was kept to a minimum.

Through various manufacturing partnerships and pricing strategies that will be discussed later, Airify
believed that it could supply the industry with a multi-protocol chip at the lowest cost. The cost of
manufacturing the chip could be as low as $6. This was much lower than any other chip that was currently
available in the industry. In a high volume industry where every dollar made a significant difference, the Airify
solution could boast over 200% margins.

Airify’s “Whole Product”4

For wireless chipset companies, it had become increasingly important to provide a whole product that
their customers could easily use. Many of their clients such as Motorola were becoming more focused on the
branding and marketing aspects of the business and outsourcing the technology to smaller companies such as
Airify. As a result, customers wanted a solution that they could be easily put into their devices, without the
need for any further compatibility engineering.

Airify was not providing simply a chip, but a whole product – a chip, the reference design, the manuals
and the software upgrades. Thus, the product would be most attractive to original equipment manufacturers
(OEMs) that were looking for a turnkey solution where all the hardware and software was already fully
integrated into the product. Airify’s multi-protocol solution was like a black box which the OEMs could easily
insert into their devices and have the product running almost instantaneously. This would also facilitate the
rapid distribution of the product to the market place.

In the long run, Airify’s engineers wanted to build a product that vertically integrated the base band,
the radio, the antenna and the power amplifier. They also wanted to build the biggest library of software
protocols, so that they could horizontally integrate all the different wireless standards together. Although their
initial product would have 802.11a, 802.11b, GPRS and Bluetooth, if a client was interested in adding a fifth
standard such as PDC to the chip, Airify would be willing to take a Non-Recurring Engineering (NREs) fee and
build that software upgrade for its customer. In this way, Airify could simultaneously bring in revenue as well
as increase its library of protocols.

Technical Background
Airify’s first product was a 2-chip solution that could be connected to 802.11a, 802.11b, GPRS and
Bluetooth. The two chips consisted of 1) the Airify baseband processor that could process the different wireless
protocols and 2) a radio chipset that had to be outsourced. The Airify chip was compatible with several off-the-
shelf single-protocol radios and some new multi-protocol radios. Airify took special effort to ensure that their
baseband processor was compatible with other Radio Frequency (RF) solutions that were in the market.
Airify’s engineers hoped to be able to provide both a flexible baseband and radio solution eventually, but they
wanted to focus their initial efforts on their baseband product.

The workload of the baseband chip was balanced between a Reduced Instruction Set Computing
(RISC) processor, a Digital Signal Processing (DSP) array and Application Specific Integrated Circuit (ASIC)
components. This allowed the chip to function at optimum performance while maintaining a high degree of
programmability. The chip also contained a sophisticated mixed signal interface that converted a variety of
wireless analog signals into the digital domain. The baseband chip was made truly programmable because of the
support software that ran on the chip. This software was able to distil wireless standards into objects,
translating the different wireless algorithms into bits and packets that computers and cellular phones could
understand. Furthermore, it could also route between the different wireless protocols and seamlessly switch
between them without losing data connection.

4 For details on how to develop a whole product analysis, see Wiefels, Paul (2002). The Chasm Companion,
Chapter 11
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An important component of this product was the software stacks that were needed for each of the
protocols. This software stack, the Media Access Controller (MAC) was a combination of software and
hardware needed to allow the baseband to understand each of the “wireless languages”. Depending on the costs
associated with acquiring these capabilities, Airify chose different methods to obtain this technology. For
802.11, it hired an Indian company to help them to write the MAC. For GPRS, it acquired it from a German
company. And for Bluetooth, it chose to develop it in partnership with a Taiwanese company.

Pricing Strategy and Revenue Model

Airify had developed a very deliberate pricing strategy for their chip. Dominik wanted to be able to
sell the chip at the lowest possible price in the market, and thus customers would always have a price incentive
to buy chips from Airify. The chip was designed to have very few external components and many of the
functions were integrated. This reduced the number of components outside the chip, and thus reduced the
manufacturing cost of the system. In developing the chip, there were also a few occasions where Airify had to
outsource certain parts of the circuitry or acquire certain technologies to develop the chip. Airify’s management
was careful to make sure that these external contracts did not include any royalty payments on the chip. Airify
was willing to pay cash upfront, or even give out company equity, but never royalty fees. Dominik was keenly
aware of the escalating costs that royalty fees could bring to a chip, and thus wanted the company to retain
control over the price under all circumstances.

Airify planned to have 3 different sources of revenues when they developed their product. The first
revenue stream would come from selling their wireless chips, complete with reference design and software. The
wireless chipset would be the main source of revenue for the company.

The second revenue stream would come from two separate sources for licensing. The first source was
for the software that was needed for the chip to be functional. Apart from buying the chip itself, customers had
to license the specific software necessary to configure the chip for a particular wireless protocol. For example, if
the customer wanted the chip to connect to both 802.11 and GPRS networks, they would need to license the
software necessary to “turn-on” the chip. If they were interested in adding Bluetooth technology later, they
could simply license the Bluetooth upgrade without having to change the chip. The second source of licensing
income came from licensing the chip itself to other manufacturers. Airify was aware that their customers would
prefer to have a second source for their chips and thus by licensing the chip to other manufacturers, they could
create a second source for the chip.

The third source of revenue would come from Non-Recurring Engineering (NRE). For large
companies that wanted a specific chip with fewer protocols, Airify would be willing to custom design a chip for
them at a lower cost.

Exhibit 6 shows the projected revenue streams for each of these segments.

Regulatory Issues
There were numerous regulatory issues that were associated with selling a wireless product. The
product needed to be tested and approved in each country and this certification process could be very long and
bureaucratic. Spectrum was a very scarce and expensive resource and the authorities had to make sure that the
product did not cause interference to other wireless transmissions and that the product operated in the frequency
range that was specified.

For Airify, this hurdle was particularly difficult because it was trying to build a chip that could be used
for many different standards. This meant that it needed to have their chip certified by all the regulatory bodies
for each of the standards. For standards that are used in the public domain such as GPRS, this process could
take as long as 6 months and cost as much as $100, 000 for each protocol. Exhibit 7 shows a table of the
different regulatory bodies.

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Partnerships
Like most early stage start-ups, it was crucial for Airify to acquire the appropriate strategic partners.
With a workforce of only 30 employees who were mostly engineers at the end of 2001, Airify lacked the
marketing, distributing and manufacturing capabilities that were necessary to push their product into the market
place.

These partners could be generally divided into three categories. 1) Technology Partners. 2)
Distribution Partners. 3) Production Partners.

Technology partners helped Airify to develop their technology. Airify used IP from several companies
around the world, including ISSC in Taiwan, LEDA systems in Armenia, Sasken in India, Condat in Germany
and InSilicon in America. These companies supplied certain key circuits that helped accelerate Airify’s
development schedule. Airify partnered with a number of RF companies, among them Ashvattha and Newlogic.
It also had agreements with established radio suppliers like Infineon.

Airify also signed agreements with multiple semiconductor distributors, including MovTech in Hong
Kong, Tokyo Electron Devices and Okamoto Corp in Japan.

TSMC (Taiwan Semiconductor Manufacturing Corporation) was the world’s largest and most
respected semiconductor foundry, building chips for fabless companies like Airify. TSMC has chosen Airify
into its Emerging Partners program. Amkor was one of the world’s leading packaging suppliers. The chips
would be shipped from TSMC to Amkor’s facility in Korea where they would be sealed in plastic ball-grid
array (BGA) packages and tested.

Customers and Customers’ Customers

Airify planned to market their product to end-terminal product manufacturers – namely laptop, PDA
and cell phone manufacturers, in that order. Although Airify’s customers were these manufacturers, it was
more important to design their products to meet the demands of their customers’ customers – the consumers.

Airify chose to target the laptop market first because the product was the easiest to upgrade. The
chipset could be easily put onto a PCMCIA card and inserted into the laptop, to allow the laptop to receive the
connectivity that was desired. There was no need for the entire laptop to be modified, thus opening the door to
the existing laptop market. Airify had already started getting contracts from modem card makers such as PCTel,
Action Tech, D-link, who were interested in acquiring these chips. Airify hoped that in the future they would
be able to deal directly with big computer companies such as Compaq.

The PDA had significantly less computing power than the laptop, and thus consumers use it only for
simple functionalities such as scheduling, contact lists, etc. There was less need to have a great range of
connectivity to support these functions. However, as PDAs became more mainstream and their computing
power improved, there would be greater demand for multiple-protocol enabled gadgets. It was possible to build
an expansion module that could be connected to the PDA. This could enable it to connect to different wireless
protocols. Airify had discussions with Palm, Handspring and Sharp, and negotiations were underway to
potentially use the Airify chip in their new products.

The cell phone was Airify’s last target, primarily because it had the least flexible design. It was not
possible to add on extra wireless functionality to the cell phone without redesigning it from scratch. Consumers
might not be willing to change the cell phone and incur the extra cost needed to allow for multiple-standard
transmissions.

The convergence of the PDA market and the cell phone market might prove to be a tremendous
opportunity for Airify. The cell phone operated on cellular wireless protocols such as GSM, CDMA, and
GPRS. The PDA would probably operate on the fixed wireless protocols, such as 802.11, and Bluetooth. The
convergence of these two devices would require a chip that could seamlessly operate over all of these different
protocols. Thus, Airify’s wireless chipset would be ideal for such a device.

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Apart from segmenting the market by products, geographical segmentation was another important
strategic consideration. Airify chose to target the US, Japan and Taiwan markets first. They chose the US and
Japan markets because they were the largest markets for laptops and PDAs world-wide. Taiwan was chosen
because it was the global manufacturing hub for much of the laptop and the PDA industry. Taiwan made a
majority of the world’s laptops, about 25% of its desktop PCs and a large percentage of peripheral products.5
Furthermore, Taiwan was also a gateway into the booming cell phone market in China.

Competitive Matrix
There were numerous companies, both public and private, who were trying to provide wireless chipset
solutions during this time. Airify had to be very wary of his competitors and the progress that they were making
in developing their technologies. Exhibit 8 provides a competitive matrix, which shows a partial list of the
different competitors and the wireless protocols that their chipsets were targeting.

Meeting with Ashvhatta

In May 2001, the executive team decided that they would enter the market in June 2002 with a chip
that was able to support up to 4 wireless protocols, namely 802.11a, 802.11b, GPRS and Bluetooth. They
believed that these were the standards that were becoming mainstream. The chip was being developed on
schedule and it appeared that they would be able to meet the expected explosion for market demand for these
chips in 2002.

However, in Sep 2001, a meeting between Airify’s management and one of their closest technology
partners, Ashvhatta, made Dominik consider including a 5th standard – Global Positioning System (GPS).

Ashvattha was another start-up that was based in Florida and it was headed by one of Dominik’s
classmates from Stanford. They were developing a flexible radio solution that could support GPRS, Bluetooth
and GPS. Their flexible radio solution was an ideal match to Airify’s flexible baseband processor. In the
negotiations, Ashvhatta agreed to include 802.11a and 802.11b on their radio solution to meet the standards that
Airify was already pursuing, if Airify would enable GPS on their chip.

This was a real dilemma for Dominik and his team. Although the concept of the product was to create
a universal wireless chip, adding each protocol to the chip was a very difficult and time-consuming process.
The software upgrade for each protocol had to be written, tested, verified and approved by the regulatory bodies
before it could be used in the open market. Adding the GPS protocol to their initial pool of 4 could potentially
delay the tape out (manufacturing) of their chip, and miss the ramp up in the market cycle of these technologies.
Many companies had tried to develop GPS solutions in the past only to give up because of the various
technology challenges.

Furthermore, when Airify started envisioning their product, they designed it to cross 2 worlds, the
cellular world and the wireless LAN world. The third world – satellite, was out of the radar screen. To include
GPS, they would have to design in some new hardware components on their chip.

For Airify to develop the GPS technology on their own would probably be too time-consuming.
However, Dominik knew of a small Iranian company headed by a friend, Ali F., who had developed a baseband
technology for GPS. Ali had independently invented a low power GPS technology using a Small Business
Innovation Research (SBIR) grant. His GPS technology only required 100mW, a tenth of the standard GPS
chip. Although Ali could already demonstrate the technology, he did not have the means to productize his
technology.

Through a series of negotiations, Ali was willing to license the technology to Airify for a one-time
licensing payment of $150,000 for the GPS baseband. He would also get $150,000 to finish developing the
technology and to import the technology onto the Airify platform. However, this money would be contingent
on finding a customer for the GPS product. Ali would also get a small percentage of Airify’s equity, but would

5 http://www.newsfactor.com/perl/story/10229.html

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Airify Communications STVP-2002-002

not get any per chip royalty, a key condition for Dominik’s low price strategy. By including Ali’s technology on
the Airify chip, the additional hardware cost would only be 1-2 cents for each chip. The product tape out would
also be delayed by about 1.5 months. The end product would have to include a specialized block of hardware
that made GPS processing possible.

Background of Global Positioning System (GPS)

GPS was developed as a military surveillance system in the late 70s. It consisted of a network of 24
satellites, orbiting 11,000 miles above the surface of the earth. At any point on the globe, a GPS device would
be able to receive signals from at least three satellites. By measuring the time it took for the signal from each
satellite to reach the receiver, and through a process of triangulation, the GPS device could then calculate its
position to within a few meters anywhere in the world. GPS was broadcasted at about 1.575 GHz. It was a
downlink, meaning that it was only possible to send information to the user, and not the reverse. However, the
target had to be outdoors where the overhead satellites could locate it. Personnel in buildings or walking in
between urban canyons (such as between two skyscrapers) posed as potential blind spots to these satellites.

Civilian usage of GPS was introduced as early as 1983. By the early 90s, GPS devices were
commonplace in many navigational systems. The marine and the aviation markets were the primary drivers for
GPS technologies, because accurate positioning capabilities were crucial for the safety and proper functioning
of these industries. In recent years, there had also been an increase towards GPS—enabled wireless handhelds
and automobiles. By 2000, the global GPS industry was estimated to be about $2.7 billion. Exhibit 9 shows the
projections of the growth of GPS device industry divided into the different market segments. On average, the
chipset would be worth about 35% the value of the device. This would make the market opportunity for GPS
chipsets for 2000 valued at around $945M.

Garmin was one of the world’s largest designers, manufacturers and marketers of GPS devices. They
were the market leader and owned about 50%-76% share of each of the markets that they were involved in6.
Other key players in this space were Trimble and Magellan. With the burgeoning demands for GPS in wireless
handhelds and automobiles, there had been much debate whether GPS device manufacturers should license their
chipset technology. Garmin had indicated that they did not intend to license the technology, but wanted to
vertically integrate the unit so that they could produce a better-designed product. Garmin was the first to
introduce a GPS cellular phone, NavTalk 1 into the market. The phone had navigational features such as
highway information and residential street upload capacity. On the other hand, Trimble wanted to extend its
reach of these new market segments by licensing its technology to key players. Through its relationship with
Bosch, Trimble had more than 50% of the European automotive guidance market. In addition the company had
teamed up with Seiko in Japan to produce one of the first integrated GPS PDAs.

GPS-enabled handhelds would also make location-based advertising a reality. For example, GPS
would be able to locate the people walking within 20 meters of a Starbucks coffee outlet, and providing them
with an electronic discount voucher for their early morning coffee fix. This ad-hoc advertising technique would
be able to bring the latest store promotions to cell phone users as they walk along the streets, and entice them to
patronize the outlet. Although industry analysts were concerned that this could result in advertising spam, they
believed that if proper introduced, location-based advertising could have significant value-added to both the
retail stores as well as the consumer.

One of the primary problems with GPS technology was that that the signal was very weak, weaker than
even the surrounding noise around it. To retrieve the information, very sophisticated signal processing was
required. This was extremely difficult and only a few companies such as Conexant, Infineon, and SiRF had
been successful in producing a GPS semiconductor chip. As a result, most device companies would prefer to
license the GPS technology, than to spend time developing in-house. On the other hand, there was no
exclusivity to the use of GPS, and thus device companies could enter this market easily by intense engineering
efforts.

6 Merrill Lynch, Global Satellite Marketplace 2001, 1 Feb 2001.

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Airify Communications STVP-2002-002

Selective Availability and e911 Initiative

When GPS was first introduced for civilian use, the Department of Defense decided to intentionally
degrade the accuracy of GPS signals for security reasons. This was known as selective availability (SA). The
positioning accuracy of GPS was “no worse than” 100 meters horizontally and 150 meters vertically 95% of the
time. This was sufficient for navigational usage of GPS in aviation and marine vehicles. However, it was not
sufficient when used in automobiles or in handhelds, because they required a higher level of accuracy.

On May 2, 2000, the US government decided to turn off SA, resulting in a ten-fold improvement in
GPS positioning accuracy to about a 10m radius. The new level of accuracy would mostly likely encourage the
development of new products and accelerate the transition of GPS products into the mainstream. Around the
same time, the Federal Communications Commission (FCC) also introduced the e911 initiative, which could
potentially make GPS a household technology.

The e911 initiative was a federal requirement that required cell phones to automatically transmit the
location of the phone when a user dialed 911. This was in place for fixed lines and the police could obtain a fix
on the location of the phone within 30 seconds – 1 min after the initiation of the call. This technology was not
yet available for cell phones. Although the FCC mandated that the first phase of this requirement had to be
complied with by 2001, the initiative had to be postponed by a year because of the absence of available
technology. Full deployment of e911 was required by 2005.

To obtain a location fix of 50 meters, as mandated by the FCC for the E911 initiative, technologies
available during that time that used only cellular protocols such as GSM, CDMA, or GPRS was insufficient.
GPS was the best technology that could meet the standards stipulated by the United States government. Airify
believed that by combining GPRS and GPS onto the same chip, they could reduce the cost, size and power
consumption of the GPS component and make the Airify product extremely appealing to cell phone
manufacturers. This could potentially be a “killer product” and gave them quick access to the 750 million cell
phones worldwide.

However, software location-fixing technologies were also becoming more advanced and could pose as
a potential threat to this strategy. One of the leading companies in this space was Cambridge Positioning
Systems (CPS). Their software product, Cursor used the Enhanced Observed Time Difference (E-OTD) to
deliver results of up to 50m on GSM products. This was sufficient to meet the requirements of the FCC e911
initiative. CPS believed that with the implementation of 3G, their software product would be able to achieve
even greater accuracies. Exhibit 10 shows a comparison table of the different location-fixing technologies.

The Meeting

The following Monday, Airify’s executive team came together in a small meeting room that had
become the focal point for many of key decisions that the company had to make. The inclusion of another
standard was a major decision and it could make or break the company. Although the team was in rather good
spirits after a restful weekend, there was an air of urgency and anticipation about the meeting. Exhibit 11
provides a brief bio of Airify’s executive team.

Dominik: We are having a meeting with Ashvattha tomorrow and they want us to decide if we are going to
accede to their request to include the GPS protocol in our initial product.

Larry: I think we are losing too much focus in our product. We are already implementing four protocols,
more than any other company out there. Adding another protocol would just create more problems for us.
Besides, we have already agreed to focus on our first four, and we should concentrate on successfully
implementing those first, before looking to add new protocols. Furthermore, our investors are also
concerned about the distraction caused by a 5th protocol

Dominik: But our vision was to create a universal chip that could connect to all standards. That is the goal
that we set out to achieve from the very beginning. Thinking of the future, implementing GPS now will

12
Airify Communications STVP-2002-002

also open us to the entire CDMA range, which is the underlying technology for 3G networks. If we could
implement GPS without too much difficulty, shouldn’t we try to include it in our product offering?

Raminda: In terms of our schedule, we will currently have samples of our initial product by December.
This product will only have GPRS and Bluetooth, but it will be sufficient to show our customers that we
are capable of bridging the gap between the cellular world and the Wireless Local Area Network (WLAN)
world. It will also demonstrate the routing capability of our chip. Manufacturing of the 4-protocol chip
will begin in April 2002. If we were to include the GPS protocol, I believe that production will be delayed
by a month and a half, and we will be able to begin production only in late May.

Aria: Although the delay in production is only 6 weeks or so, it is during a critical time of the year. If we
only begin production at the end of May, it will probably take a couple of months for us to ship our chip to
our clients and for them to include our component into their devices. This might cause our clients to miss
the year-end spike in sales. In other words, we could be delaying an entire year of sales if we miss this
cycle. Furthermore, porting another standard to our platform could create problems that we are currently
unaware of, and that could delay our production even more. Ali has only tested his technology on a FPGA
(Field Programmable Gate Array) Platform and we still do not know if it will work when we try it with real
satellites.

Dominik: Robert, what do you think will be the risk of the technology not working?

Robert: That is hard to say. But I would estimate the technology failure risk to be about 20%. We must also
remember that Ali’s company is very small and outside of the United States. There is a chance that they
might go out of business or run out of money. I would estimate that risk to be about 15%.

Aria: Those are significant technological risks. The cost of implementing GPS will set us back by about
$300,000. Although that is considered to be relatively inexpensive, it is substantial for a small start-up like
us – we only have $2 million in the bank. We will also be giving away 3% of our stock.

Uma: We should also consider the fact that the federal government has mandated that e911 be
implemented by next year. This could potentially increase the demand for GPS chipsets in cell phones.
With the increase popularity of GPRS next year, a chipset that is able to support both GPS and GPRS
simultaneously may become a “killer product”. Not to mention that we are also able to support the 802.11a,
802.11b and Bluetooth protocols as well.

Dominik: The market potential for GPS is indeed something that we should take into consideration.
Furthermore, Ashvattha is a very strong partner for us, allowing us to offer a complete, vertically integrated
solution. Offering a multi-mode baseband chip is difficult without also having a multimode radio, so we
need to find a solution that allows the partnership to continue, while minimizing the risks to Airify. If we
decide not to partner with Ashvhattha, it would mean that we need to source for other potential partners
who are able to provide the radio components. This might mean 2 or even 3 more radio chipsets to be
included in the product. This would increase the size and the power consumption of our product offering.
The negotiations with other partners could also potentially delay the roll out of our product.

Dominik: Considering all these factors, we must now make a decision whether or not to include GPS in our
product roadmap.

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Airify Communications STVP-2002-002

Exhibit 1: Worldwide Subscriber Growth of Cell Phones (in thousands).

1,800,000
CAGR 42%
1,600,000
CAGR 55%
1,400,000
1,200,000
In Thousands

CAGR 51%
1,000,000
CAGR 55%
800,000
600,000
400,000

200,000
0
1994 1995 1996 1997 1998 1999 2000 2001E 2002E 2003E

Source: Salomon Smith Barney, Global Wireless Equipment Investor, June 7, 2001

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Airify Communications STVP-2002-002

Exhibit 2: Pictorial Representation of Wireless Segments

1. Wireless Component
Providers

3. End Terminal Manufacturers

a) Laptops
2. Network Equipment b) PDAs
Manufacturers c) Cellphones
d) Automotive Telematics
e) Wireless-Enabled Appliances

4. Carriers

Consumers Enterprises

5. Wireless Software Providers

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Airify Communications STVP-2002-002

Exhibit 3: Global WLAN IC Revenues

Source: CIBC World Markets, Texas Instruments, Apr 23, 2002

Exhibit 4: Worldwide Market: Bluetooth IC Revenues ($ Millions)

Source: CIBC World Markets, Zarlink Semiconductor, Jan 8, 2002

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Airify Communications STVP-2002-002

Exhibit 5: Airify A1000 chip schematic.

Standard 32 bit FLASH RTC

Processor Core
Operating System PCMCIA

C
M MAC
Multiprocessor RISC Core
O
S DSP core
Analog
Core
R
A
M GPS
Cache Memory Controller
TCP/ Boot, Blue Uart PCI USB
IP Input Tooth

Source: Airify Company Data.

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Airify Communications STVP-2002-002

Exhibit 6: Revenue Model for Airify Communications

2001 2002 2003 2004

Revenue (US$)
Chip Sales 0 0 31,768,000 69,900,000
Licensing Fees 0 125,000 500,000 1,000,000
NRE Contracts 0 125,000 500,000 1,000,000
Total Revenue 0 250,000 32,768,000 71,900,000

COGS 0 0 15,248,000 24,534,000

Gross Margin 0 0 17,520,000 47,366,000
% of Revenue 0 0 53% 66%
Expenses 4,000,000 11,829,000 15,060,000 25,808,000
Pre Tax Earnings (4,000,000) (11,579,000) 2,460,000 21,558,000
Source: Airify Company Data

Exhibit 7: Regulatory bodies

Protocol Regulatory Board Geographic Location

GSM, GPRS, EDGE ETSI South France
3G 3GPP South France
802.11 IEEE New Jersey
GPS None None
Source: Websites of regulatory boards

Exhibit 8: Competitive Matrix in the wireless chipset space

Company 802.11A 802.11B Bluetooth GPRS GPS

Airify ! ! ! ! ???
Cisco !
Agere Systems !
Mobilian ! !
Broadcom ! !
Intersil ! !
Plextek Ltd ! !
Atheros !
Qualcomm !
CSR !
Infineon ! !
SiRF !
Source: Airify Company Data and Lehman Brothers, Wireless Networking ICs, August 28, 2001

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Airify Communications STVP-2002-002

Exhibit 9: Global GPS Industry Projections

Source: Merrill Lynch, Global Satellite Systems, Feb 1, 2001

Exhibit 10: Comparison table of Location-Fixing Technologies

System Commercial User Speed Of Mobile Handset

Accuracy lability Controlled Response Network Cost
on GSM Privacy Upgrade Increase
Cost
15m to Less than 10
E-OTD 2000 Yes Medium Nil
150m seconds
Variable Minimal
Less than 10
Cell ID 250m to 1999 No (MSC Nil
seconds
30km Interface)
Cell
150m to Less than 10
ID/Timing 1999 No Minimal Nil
30km seconds
Advance
Generally +40% Plus
Less than 10 Medium
Assisted better than impact on
2002 Yes seconds to 1 (standards-
GPS 50m if style and
minute compliant)
available battery life
Difficult to
Time 2002 (non-
achieve Less than 10
Of standards No High Nil
better than seconds
Arrival compliant)
150m
Unlikely to No known
Angle of Less than 10
achieve commercial No High Nil
Arrival seconds
150m solution
Source: http://www.cursor-system.com/sitefiles/cursor/tech_technology.htm

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Airify Communications STVP-2002-002

Exhibit 11: Profiles of Airify Executive Team.

Dominik J. Schmidt
CEO

Dominik has 12 years of experience in engineering and management, and is currently CEO of
Airify Communications. Prior to founding Airify he was CTO of Efilm Corp, designing a wireless
imager chip. Between 1997-99 Dominik was Vice President of Manufacturing at Pixel Devices, a
leader in high quality mixed signal chips. Dominik was at Altera Corp between 1989-1997,
developing new transistor technologies and memory architectures with Sharp, as well as a new
product line in partnership with Cypress Corp. Dominik has worked as a researcher at the
Lawrence Berkeley Labs and the Stanford Linear Accelerator. Dominik received multiple business
and technical degrees from Stanford University and UC Berkeley, holds a California PE license,
has more than 20 patents granted and pending and has published several papers. He also teaches
advanced analog design at UC Berkeley.

Uma Jha
CTO

Uma has over 22 years of industry experience specializing in the communication systems
architecture and systems engineering. He is internationally known for his cellular systems know-
how and expertise and frequently gets invited to chair the technical sessions and deliver the
lectures in the area of cellular and wireless communications all around the globe. Prior to joining
Airify Communications, Uma was responsible for setting up and building up the systems team at
Morphics Technology as a Director of Systems Architecture engaged in development of the
reconfigurable 3rd generation (3G) cellular systems. Earlier Uma held a position of Engineering
Manager at Philips Semiconductors, where he built the IS-95 (CDMA) systems team from ground
up. Prior to this Uma was part of the Conexant’s early wireless team and was responsible for the
development of the baseband signal processing algorithms for the GSM cellular standards and
ARDIS data packet radio. Uma started his career in the defense industry, where he worked as a
key contributor in the area of avionics, communication and electronic warfare. He received his
BSEE from Ranchi University, MSEE from CSU, Fullerton and Engineer degree (equivalent to Ph.
D. without thesis option) from USC, Los Angeles. Uma is a senior member of IEEE and has several
publications and has filed for several key patents in the area of 3G cellular communications.

Aria Mehrabi, Ph.D.

CFO

Dr. Aria Mehrabi is a Co-Founder, and the Chief Financial Officer for Airify Communications. He
has experience with technology companies, both in start-up environments and in large
corporations. Most recently, Dr. Mehrabi worked with an opportunity fund, RPD Catalyst, as Vice
President of Acquisitions where he engineered novel financing mechanisms to source and acquire
complicated telecom deals. Dr. Mehrabi was also the Co-Founder and President of eFILM, LLC, a
high-tech startup committed to developing leading-edge CMOS imager technology. Dr. Mehrabi
received his BA degree from the University of California, Berkeley, his MRED degree from the
University of Southern California, and his Ph.D. in Economics and I.R. from Johns Hopkins
University, SAIS.

Robert W. Sherburne Jr., Ph.D.

Chief Digital Architect

Dr. Sherburne has over 20 years of industry and academic experience focusing on the design of
microprocessors, graphics processors, digital signal processors, and analog sampled data systems
including CCD’s. During the twelve years prior to joining Airify he architected and designed
graphics subsystems for SGI, including Indigo, Indy, Nintendo64 and VPro products. Prior to SGI
he was with PIXAR, where he initiated and led the CMOS/ECL ASIC effort for the Pixar Image
Computer. He also worked with Integrated Circuit Systems, Inc. on design of a single-chip PDP-
11 (T11), and at the GE Corporate Research and Development Center on CCD’s. He was formerly
an Assistant Professor at Rensselaer Polytechnic Institute where he initiated a graduate class on
VLSI design for RISC microprocessors. Dr. Sherburne received his MSEE and PhD from the
University of California at Berkeley, focusing on RISC microprocessor design; while at Berkeley he
taught the microelectronic fabrication class and was co-designer of the RISC II microprocessor as
presented at ISSCC 84 and in the IEEE JSSC October 1984.

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Airify Communications STVP-2002-002

Steven R. Sweitzer
VP, DSP Development

Steve has twenty-two years of experience in the design and manufacture of wireless and wireline
data communications equipment. His primary area of expertise is DSP algorithm development. At
Airify, Steve will be responsible for the design and verification of DSP algorithms for a custom
GSM/GPRS/EDGE mobile data terminal. Steve was a Co-founder of Morphics Technology and
developed basic algorithms for the physical layer of GSM and IS95 wireless technology. Steve
has also developed a DSP-based pair gain system compatible with V.90 modems and developed
and licensed a C model for G.992.1 and G.992.2 ADSL modems. He has also worked on dozens
of DSP-based data communications projects: wireline products included V.22bis, V.32, V.34, and
V.90 voiceband modems and wireless products included IS54, PDC, and the MetriCom Ricochet
wireless data modems. His other experience includes his tenure as modem design engineer at
Hayes Microcomputer and GTE Sylvania. Steve received an MSEE from Cornell University and a
BSEE from University of Vermont.

Larry Matheny
VP, Business Development

Larry has over 20 years of experience in the technology field as a sales and marketing guru. He
has been involved in and funded numerous startups in the Silicon Valley. Larry began as an
engineer working for Aerojet Electrosystems, focusing on system design for IR sensors and focal
plan design. He spent 3 years at Hughes R&D in Los Angeles and 5 years at Rockwell
International in Orange Country, where he was a sensor designer, working on systems integration
with early warning acquisition missile systems. Larry moved on to a managerial position in
strategic marketing and became the Director of Applications for semiconductor products at Texas
Instruments. Then, he founded Synmos, a DARPA contract for combining university IC designs
into one silicon wafer; he sold the company to Matra Harris Semiconductor and became the
President of Matra Harris for 2 years--he designed and sold semi-custom design tools and
provided services for IC design. Larry is also a founder of MSIS and he has several successful
investments with a VC firm in the Silicon Valley, Caltos.com. Larry received his MS Electrical
Engineering from CSU, 1977.

Raminda Madurawe
COO

Raminda has 17 years of experience in the semiconductor industry. He held Director of Product
Engineering, Director of Process Technology positions at Altera corporation. During his 11 year
tenure, Altera annual revenue grew from 60M$ to 1.2B$. His background is in resolving
engineering issues and delivering product to customers – managing supply chain events and
maintaining schedules. At Altera he rolled-out MAX7KB PLD product family, conducted test
development, off-shore test transfer, cost reductions, process development and project
management. As project manager for Serial Memory product line, he introduced 16M/32M
Stacked CSP Flash memory products. He was also responsible for protecting a 100M$ investment
at WaferTech, managing product transfer, product delivery, ramp-up, and yield management. He
managed a division of 40 people, and projects involving over 100 participants. Prior to joining
Altera, Raminda worked at National Semiconductor for 6 years, working as a process engineer in
Bipolar Si wafer fab, and later in process integration developing CMOS processes. Raminda has a
B.S (IIT-Madras), and MS (MIT) degrees in Chemical Engineering and an MS (Stanford) degree in
Electrical Engineering. He holds over 30 issued patents, co-authored IEDM papers on joint EPROM
& EEPROM process developments with Cypress Semiconductor and Sharp Corporation, and taught
device physics at Altera.

Source: Airify Company Data.

21